Dateline: Los Angeles
Fiscal Year 2016 KFPK Budget Analyzed by Former Treasurer
Comments on the KPFK FY2016 budget
The FY2015 budget numbers used in the draft FY2016 budget and in the Income Statement for comparison is not the budget that was approved by the PNB, NFC and LSB late fall, 2014. KPFK Treasurer Novick has been asked to find out at three sequential Finance meetings where these budget numbers came from and why they’re being used but to date has not provided an answer. Therefore, comparisons of this FY2016 budget to the FY2015 budget or to the FY2015 Income Statements (Profit & Loss) are not reliable or legitimate.
The Finance Committee met on Tuesday, August 18. Neither the GM nor Treasurer could answer what the listener revenue was based on. To be legitimate it must be determined in the budget as the amount of fund drive days times the per day average, based on historical records. Many other questions were asked of the GM but there were few answers. The GM finally said she was too busy learning the Great Plains accounting software to know everything that’s in the budget.
The LSB met the following day and approved this budget. See Revenue below for details.
This is the most distressing area to report. What is going on here is union busting of our union staff. This is the shock doctrine happening at KPFK. Like New Orleans after Katrina, they used that tragedy as an “opportunity” to eliminate public schools and replace them with charters, thus eliminating all union teachers. The complete lack of oversight and any financial records for almost a year by the present board majority (who have stayed in power due to not holding a mandated election in 2014) in the last year and a half has created just such a manufactured “financial crisis” to which they are now using that opportunity to serve their own purposes, not those of the listeners.
At the Finance meeting, the GM said the cuts to personnel will be as follows: on September 1, on a temporary basis, we will “lose” 10 FTEs (Full Time Employee) for three months – everyone who is full time (1 FTE) will be cut 50% or to 0.50 FTE. The two management positions, GM and iPD, will also be cut to 0.50. On September 15, we will permanently “lose” 2.5 FTEs for a total of 12.5 FTE cuts. (Note: at the July 14 Finance meeting, I presented a motion, which said, in pertinent part: “All non-union staff shall be terminated until an overall agreement with union staff can be made.” The Chair ruled this out of order. The GM stated that all non-union, non-budgeted employees were no longer employed. The GM’s statement was false. There were at least three non-union and non-budgeted employees on payroll and two are in the FY2016 budget. Full benefits for the now half-timers, such as health care, will remain in place. The GM said these cuts are “for a period not to exceed four months.” In November-December the FTEs will go back up to 25.
Unfortunately, the GM’s numbers do not match the actual employees.
The union has not signed off on this. The GM said KPFK, on advice of attorney Dan Siegel, will simply go into arbitration with SagAftra. SagAftra has filed a grievance against KPFK and arbitration is the next step. KPFK’s GM has not offered any alternate plan as far as I know. A likely outcome will probably be that the GM and her attorney, Siegel, will be told they are breaking the contract and all back pay will be due to the employees. This seems to be merely a delaying tactic to further diminish KPFK’s resources, disrupt business and punish staff.
The GM’s cuts do not have any basis in the reality of running a radio station. Only after the GM announced these across-the-board cuts did she ask the staff what their duties were and what wouldn’t get done with their new half-time hours. A cart before the horse action.
Although these cuts apply to everyone not just the on-air hosts, I have never seen a cost/benefit analysis of how much listener revenue the paid on-air hosts raise on their shows. They raise practically 100% of the listener support that comes in for public affairs programming. Cutting their time in half is guaranteed to reduce listener support even further. No matter how much happy talk there is about all the new programming to come, even in the best case scenario, which is not likely, it takes time for any new program to gain popularity and support.
This seems designed to deny severance to those who have toiled at KPFK for many years and, through no fault of their own, are now made to suffer for management failures and bad board actions. In a further act of mean-spiritedness, since they are not being laid off (with their earned severance), if they quit, they will not be able to get unemployment.
This seems no more than a plan to drive away all of the present staff, not pay severance, hire all new people, and get around union rules. This amounts to union-busting. Based on the under-estimated revenue in this budget, a return to full-time status is not likely and clearly not anticipated by the makers of this budget and those that approved it on the LSB. Furthermore, if KPFK’s business plan model is to be changed to an “all part-time employees” model, or all volunteer (with, of course, a paid GM and other management), then such a significant paradigm-change should be discussed fully and considered on its own merits at all levels of Pacifica/KPFK governance, and not “slipped-in” under the guise of a temporary financial emergency, only to become the new, permanent status-quo later. Despite the GM’s public statements promising to restore the present FTE cuts in four months, this does not seem at all likely – or even desired by management.
For an organization with a history of advocating for social justice and union rights, the Pacifica National Board majority also seems to be on board with union-busting at KPFK.
Notwithstanding the ideological meanness of this unworkable plan, it is unknown what the real budget numbers are for personnel costs in this budget.
Listener Support. At the LSB meeting, the day after the Finance meeting, neither the GM nor the NFC rep, Brazon, could say what the proposed $3,053,595 in listener revenue was based on. Treasurer Novick produced a two page narrative of fuzzy numbers – somewhere between 81 and 89 fund drive days at $30,000 per day. Neither of the three could tell us how many fund drive days there were this year. That number is 135. The per day average for FY2015 averaged about $24,000 (assuming no more fund drive days this FY). The per day average for this last drive was about $17,000. Projected revenue must be based on historical evidence with real numbers – not wishful thinking.
However, using one choice of Treasurer Novick’s numbers, the calculations are: 89 days at $30,000 = $2,670,000 [pledges] @ 80% fulfillment is $2,136,000 for listener support. That is ($917,595) less than the budget for listener support and the $30,000 per day is merely hopeful not realistic. Treasurer Novick presented some other non-fund drive ideas for raising money, all of which have been talked about before, but to date have raised little to nothing. Such efforts cannot be relied on to make up the $900,000+ difference in listener support. And even so, most of these ideas are not listener support and would fall into some other category. Deduct $917,595 from listener support revenue.
Website income is close to $200,000 but for some reason doesn’t get broken out at KPFK. This has been an area of growth, but is obviously a political battle not having to do with the financial health of KPFK.
Community Events. This category needs more transparency and accountability for these largely cash events.
Renewals (of lapsed memberships) at $30,000 is overly optimistic for a variety of reasons.
Grant Income – non-operating – This does not go on the operating budget because whatever money comes in is not to be used for operations but for some other designated and restricted purpose. Deduct $30,000.
Restricted/Contribution/Special Projects. This contains:“Special projects” – Whatever that is.
FSTV (aka Uprising TV show) – I have asked repeatedly for some clarity on this. This has a separate bank account, a separate contract and a revenue stream and expenses that are not KPFK’s. The GM said the revenue goes to the Pacifica N.O. and “somehow” comes back to KPFK. FSTV needs its own budget and should not be co-mingled with KPFK’s budget. There is, apparently, an FSTV fund drive the GM is planning which should not be on KPFK’s operating budget.
Studio A – Payback of $30,000. Does not go on operating budget.
Miscellaneous – FSTV YouTube channel. Goes in FSTV budget. Present revenue – non-existent. Deduct $22,000.
What is the status of the Film club and the subscribers to it? Now that the position of the Film Club coordinator has been eliminated, who will be servicing the members who have signed up for this? There may be members asking for their money back.
The GM’s plans for soliciting grants this year may be difficult since there does not appear to be an audit forthcoming until well into the first quarter of FY2016, if we’re lucky. Grants will not be awarded without a current audit being provided to the potential grantor.
When Treasurer Novick told the LSB his proposed assumptions for listener support, I pointed out the approximate $900,000+ shortfall in listener support. The Acting Executive Director, PNB Chair and KPFK’s National Finance Committee representative, Brazon, made an amendment to approving the budget: that the LSB shall fund raise with a goal of raising $5,000. Add $5,000.
Total Revenue – Deduct $1,008,595 for total revenue of $2,310,139
Telephone – The budget is $127,000 which would be accurate based on historical data. However, the GM said costs would be going down due to new VoIP system. In the Fund Drive line item, she thought the new VoIP phone system was included there. Will there now be two phone systems – one for operations and one for fund drives? We need some clarity. Where are the staff cell phone expenses? Should this line item be reduced? Or increased?
Insurance – There is no Earthquake Insurance expense and it appears no earthquake insurance was paid FY2015. Are we doing without? Why? Add $12,000.
State Filing Fees – Looks like this hasn’t been done in FY2015 yet. Someone should look into this. It appears to be overestimated for FY2015 and in the FY2016 budget unless there’s some change in status which we should be apprised of. Deduct $16,000.
Rent and Lease of Equipment – Is there some reason this will be lower than FY2015? Or just wishful thinking?
Utilities – Office – It was $68,000 in FY2014 and is presently at $52,000 with two months to go in this FY. Unless there’s some reason we don’t know $46,000 seems low. Add $10,000.
Total Admin – add $6,000 total.
News Department – Stringers –It appears this unbudgeted expense has already started. Not sure what the $41,000 in column S denotes.
Programming Services – FY2016 budget = $40,873. Projected for FY2015 = $27,249. Actuals as of July = $38,508 with two months left to go in this FY. Everything in this line item was unbudgeted and otherwise unapproved by the LSB. It contains expenses for FSTV such as contractors which should be reflected separately in personnel expenses and otherwise under the FSTV category. The other expenses belong elsewhere. Unless there are specific expenses denoted for this category, which presently there are not, deduct $35,000.
Other Programming – Since this used to be for Arbitrons, which service we are told has been canceled, there appears to be no purpose for any expense. Deduct $5,000.
Maintenance – Technical – Considering the recent two hour off-air experience, the budgeted amount may not be enough. KPFK has purchased two new Nautel transmitters and rebuilt a backup generator for close to $250,000 in the last few years for the express purpose of not going off the air. What else can go wrong that we can’t anticipate?
FSRN – Why is KPFA offloading $5,000 of their bill to us? It was not approved as an expense last year when it suddenly appeared as a paid item.
Total Programming – deduct $40,000 total.
Caging – Why is this going up when it should be going down?
Fund Drive Expenses – The GM was very fuzzy about what’s in here – phone lines for phone room? Food? Contract people? The amount is extraordinarily high. We don’t historically pay for food but get donations. The food coordinator was just fired. Hiring new contract people might be a problem and, at any rate, should be in personnel costs. If there are phone costs in here, there needs to be a different line item for phones for fund drives which are related to operations. There needs to be a delineation of defined costs in this line item. Deduct $35,000 total.
Advertising/Promotions – According to the GM, there is no plan in place for this allocation of $21,000+. It seems like a lot when personnel is being cut so dramatically and there is a $1M deficit in revenue before the year even starts. Unless there is a real plan for a specific advertising campaign this is not enough money to do anything meaningful. A motion was passed to keep it in, but I would recommend not.
Printing/Marketing promo – $12,000 for Club Cards, tabling supplies, banners. Seems like a lot for this item considering the overall deficit.
Community Events – It seems to me that not all expenses have reached this line item yet. Or they are buried elsewhere. I think this is an under-estimate.
Development: deduct $35,000 total
Overall Expenses – deduct net $69,000 from expenses.
This clearly is not a balanced budget, as it runs close to a one million dollar deficit, and should not be approved as is by the NFC.
LSB Member and Former Treasurer